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The Reserve Clause: The reserve clause, contained in all standard player contracts, stated that, upon the contract's expiration the rights to the player were to be retained by the team to which he had been signed. Practically, this meant that although both the player's obligation to play for the team as well as the team's obligation to pay the player were terminated, the player was not free to enter into another contract with another team. The player was bound to either a) negotiate a new contract to play another year for the same team or b) ask to be released or traded.

Struck down by the Seitz Decision: The Seitz decision was a ruling by arbitrator Peter Seitz on December 23, 1975 which declared that Major League Baseball players became free agents upon playing one year for their team without a contract, effectively nullifying baseball's reserve clause. The ruling was issued in regard to pitchers Andy Messersmith and Dave McNally.

"(Van) Mungo and I get along fine. I just tell him I won't stand for no nonsense, and then I duck."
Casey Stengel

I did not know where else to post this. Before free agency what happened to players when there contract ran out.

Players served at management's discretion. Typically, soon after the New Year each year, field managers, general managers or owners (depending on who ran personnel matters for a specific team during varying eras) mailed out contracts. They offered contracts to whomever they wanted. They released, traded or otherwise disposed of those they didn't.

Contracts were typically for one year, though a minority were multi-year depending on star status and/or the volitility of the labor market. Players could haggle and they did but at no time did anyone of substance take the player's side in individual negotiations - except perhaps the media at times. (Landis was no big benefactor of the common ballplayer as some might suggest.)

Players freely flowed from the majors to the minors and between numerous minor leagues. The 19th century was a rough time for players - the owner's, like their mentors the Robber Barons, cared little for the individual worker. Societal norms and government interference in labor changed as time progressed and this effected how ballplayers were treated as well.

After the advent of the reserve clause, players were extremely restricted - especially when it was used in conjunction with the dreaded blacklist (plus rosters were a max of 12-18 players in certain eras). Some players had success in negotiations and those instances garnered press coverage then and discussions today. The majority had to take what was offered.

I think that the incredible thing about the Reserve Clause is that it stayed in effect for so long. If you read it it really doesn't say much of anything exscept some legal gobbly-gook. The owners presented this Reserve Clause to players as if it was a cast iron legal agreement. It was in all standard players contracts. There were no player agents in those days. Teams and players negotiated themselves. A player attempting to bring in someone to represent him would find the team simply would not talk to the representative.

There were times when it was about to be challenged. The most intersting was during the AL - NL players war when the AL was signing players from the NL teams. The Phillies, upset at losing some players, took the AL and Philadelphia A's to court. At one point they wanted to utilize the Reserve Clause as a legal agreement to force the players back into the Phillie organization. Fellow NL owners whispered in the Phillies ear to not go that route fearing that the courst would recognize the Reserve Clause for what it was, legal smoke and mirrors. The Phillies I suspect were actually threatened with reprisals by the other NL owners when they wouldn't listen to reason at first.

Ban Johnson, had his AL owners drop the Reserve Clause in AL contracts to better entice players to jump to the AL in addition to higher salaries. He later agreed to put it back into all standard player contracts when the NL and AL agreed to peace. He intened to do that all along.

Remember, Marvin Miller, when he first read the Reserve Clause was totally astounded at what little it really meant. he knew right off if he challenged it the Players Union could win. That is the thing the owners dreaded all along.

As mentioned in an earlier post, the Messersmith/McNally ruling by Peter Seitz was the end of the Reserve Clause...but it, or variations of it, had lasted for years and years.

Well, legal goobledygook is what a contract consists of. The problem here was that the clubs needed more gobbledygook, and gobbledygook of a higher grade. I wonder who it was who wrote the particular version of the reserve clause that Seitz reinterpreted, and how long it had been in the contract.

Actually, ball clubs found themselves in court repeatedly during the period between the middle 1880's and 1910's, attempting to protect their reserve rights or their rights under signed contracts. For a mixture of practical logistical and legal reasons, it proved nearly impossible to enforce even contracts, much less reserve rights. When the Giants sued in 1890 to stop John Ward and Buck Ewing from jumping to the Players League, the judge in Ward's case observed:

"We have the spectacle presented of a contract which binds one party for a series of years and the other party for ten days, and of the party who is itself bound for ten days coming into a court of equity to enforce its claims against the party bound for years.”

And in Ewing's case, another judge ruled:

"As a coercive condition which places the player practically, or at least measurably, in a situation where he must contract with the club that has reserved him, or face the probability of losing any engagement for the ensuing season, it is operative and valuable to the club. But, as the basis for an action for damages if the player fails to contract, or for an action to enforce specific performance, it is wholly nugatory. In a legal sense, it is merely a contract to make a contract if the parties can agree.”

And likewise 25 years later when Hal Chase jumped to the Federal League:

“The plaintiff can terminate the contract at any time on ten days’ notice. The defendant is bound to many obligations under the remarkable provisions of the national agreement...Can it fairly be claimed that there is mutuality in such a contract?...absolute lack of mutuality.”

However, the courts were merely refusing (usually; there were exceptions) to intervene to enforce the clubs' rights when they were challenged. If there were a major trade war going on, the players were left free to exploit it in order to free themselves from the restriction of the reserve. If there was no such war -- and the great majority of the time there was no major outlaw league in operation -- then the players had no recourse, because organized baseball maintained its clubs' reserve rights by mutual agreement. What happened in the 1970's is that the system was reformed from within, so that the clubs of organized baseball themselves abandoned it.

In the late 40s Danny Gardella refused a Giants contract offer after playing for them for a few years, and opted for an offer from the Mexican League. Upon his return, he found himself blacklisted from baseball. He sued, lost, appealed and in February 1949, the Second Circuit Court of Appeals, in a 2-to-1 ruling, sent the case back to District Court and ordered a full trial on Gardella's contentions.

Rather than face a potential court loss, baseball allowed him back in with a very brief tour with the Cardinals (one game, I believe) and offered him a disputed amount of monetary compensation.

Curt Flood similarly refused to accept a trade from the Cards to the Phillies. He sat out the season and signed with Washington the following season for a similarly brief (perhaps one game) interval.

With these actions, the stage was set and the method identified for McNally, Messersmith et. al. And here we are.

1975 regime

There is no answer that covers the 1880s to 1970s. How long a period ending in 1975 does one answer cover? So far, it appears that "nobody knows" in this forum. From our perspective it is an indefinite period.

We may characterize the period by the practically standard contract within Organized Baseball and the practical absence of independent professional baseball. The latter matters because the clause in player contracts had been a dead letter for a long time, regarding any possibility of enforcement by injunction or damages. A player who moved from OB to an "outlaw" job would merely be banned from future employment in OB (at worst).

Originally Posted by Eastvanmungo

The Reserve Clause: The reserve clause, contained in all standard player contracts, stated that, upon the contract's expiration the rights to the player were to be retained by the team to which he had been signed. Practically, this meant that although both the player's obligation to play for the team as well as the team's obligation to pay the player were terminated, the player was not free to enter into another contract with another team. The player was bound to either a) negotiate a new contract to play another year for the same team or b) ask to be released or traded.

That is a good answer for the indefinite period ????-1975, insofar as ...
but let me put it in terms of two open questions.

(1) When was there was practically no alternative outside OB.
--perhaps no full-time seasonal employment outside OB in the United States and Canada? (and there were OB strings to some foreign lands)

(2) When did OB require a contract including its 1975 reserve clause, either strictly require of all clubs or practically cease granting exceptions.

(Prehistory of the 1975 regime may be more interesting but I've wondered how old was the 1975 regime. Now I finally get around to asking somewhere.)

(1) When was there was practically no alternative outside OB. --perhaps no full-time seasonal employment outside OB in the United States and Canada? (and there were OB strings to some foreign lands)

(2) When did OB require a contract including its 1975 reserve clause, either strictly require of all clubs or practically cease granting exceptions.

(1) Most of the time, I would think. There were major trade wars in 1884, 1890-1891, 1901-1903 and 1914-1915, and in each case neither side recognized any reserve rights claimed by the other side. This covers a period of eight years, about a quarter of the period from the inception of the full-roster reserve in 1883 to 1915. After 1915, the brief, somewhat farcical but not insignificant challenge by the Mexican League following WW II was the only challenge to the established order worth mentioning from 1915 to 1975. You'd have to say that industrial peace and an unbroken front on maintenance of the reserve regime were by no means unbroken early on, but at all times they were the norm, rather than the exception.

Until some relatively recent date there were always minor outlaw leagues, and occasionally a major leaguer might be found playing for one of them, but that was a rarity. Most players can hardly have felt leagues like this were a palatable alternative to signing with the OB club that held their reserve rights.

(2) Virtually from the very start of the full-roster reserve labor regime in 1883, the Board of Arbitration, the governing body of the clubs bound together under the National Agreement, announced that it would refuse to recognize written or oral promises to exempt players from future reserve list. Of course, teams could not be forbidden from allowing valuable men to go unreserved because of promises previously made, but they could and, on at least two occasions I know of, they did decline to intervene on the player's behalf when clubs violated such promises (you can't talk about "omitting the reserve clause" at this point because the reserve right was not yet embodied in a clause in the standard contract, but the issue is essentially the same).

I can't say that OB's governing structure always took that position in subsequent decades, but are there any twentieth-century cases of valuable players who were granted free agency because their clubs had agreed when they signed their previous contracts either to omit the reserve clause from that contract, or to refrain from exercising it after the season? I don't think there's a single such case; certainly I can't think of any. Had there been any realistic hope of getting away in this way, surely players would have occasionally taken advantage of it.

"If prior to March 1, the Player and the Club have not agreed upon the terms of the contract, then on or before 10 days after said March 1, the Club shall have the right by written notice to the Player to renew this contract for the period of one year."

That is the entirety of this infamous, dreaded clause. That's it. No more, no less. Of course, it was legal nonsense, made no sense and was ridiculous.

The owners knew it and the players knew it. In 1914, Walter Johnson actually wrote an article and he used the phrase, 'player slavery'.

Since the clause was completely illegal, the owners lived in constant terror that it might someday be taken to court and challenged. It would have surely been flushed down the toilet of history quite quickly.

The owners were cunning enough to secure for themselves an exemption from the national Sherman Anti-Trust Law. This was a naked admission that they were in flagrant violation of a person's right to work according to normal business rules. If they didn't think they were in violation of it, then why the need for an exemption at all?

This baseball situation is a typical example that laws actually do not mean much. The only thing that is important is if people think they do and thus act accordingly.

So, even though the 'reserve clause' was illegal, the players acted as if it was legal. The players were not uniting to demand their rights.

If the players had simply refused to sign contracts with the reserve clause in it, what could the owners have done? Nothing. But the players were far too cowed to refuse such contracts, and continued to sign away their normal, legal rights, year after year, decade after decade.

If only one player refused to sign such an illegal contract, the courts would probably not have enforced their legal rights. The courts would have probably backed the owners, because the owners had more money to hire arrogant lawyers, and had more political clout.

But the players had enormous resources if they had only acted collectively. But it will remain a mystery why they acted like sheeple for over 100 years.

Often the courts will not enforce people's normal, natural rights. The income tax has been illegal since 1908, yet the courts routinely refuse to enforce citizens' rights.

Even if the reserve clause had even been put into written contracts, if was entirely probable that the other owners would have simply followed an unwritten 'Gentleman's Agreement' to not sign other owner's previous players. So, the clause need not have been written down to be passed on, generation to generation.

That is how the Color Ban was enforced. It was never a written document, only an implied agreement among owners to not hire blacks as baseball players.

That is how blacks were kept out of many white neighborhoods for so long. Apartment owners colluded secretly to not rent them apartments/houses. And that crap is no doubt still going to continue as long as the culprits can get away with it.

That is how social cliques are maintained in high schools. That is how the Pennsylvania Dutch Amish people preserve their social traditions - shunning.

The only way that things ever change, is if large numbers of right-thinking progressives unite and mobilize. The many can use collective counter-measures to neutralize the long-running hateful habits of the few.

Power seldom gives an inch. It will fight long after it is discredited and socially condemned. It lives in the dark, and pays big money to high-priced lawyers. High-priced legal whores have lived like kings by doing the bidding of the few privileged people who sign their checks.

The baseball owners have long retained the services of such amoral lawyers. In-house whores who make their clients rich, and enrich themselves along the way. They will never quit. Not all jungle animals walk on all fours. Many wear 3-piece suits and populate corporate board rooms, and the corporate back-rooms, where the secret crap is hatched, camouflaged and spewed.

They locked out of the baseball pension in the 50's all the early stars. They locked out of the American Dream all blacks ballplayers until 1947. Then they let in only the black stars, all the while kicking and screaming. Then they continued to lock the black journeymen out of the American Dream until the 60's. They continue to refuse to send out small stipend checks to their black victims who are still alive today, waiting in nursing homes to die.

These same vile baseball millionaires will refuse to hire blacks in many management positions, or managers' positions, or umpire jobs, or cushy stadium concessionaire positions, or many coaching jobs. Why?

Because power seldom gives an inch. It only backs up strategically, if it believes it has to, when confronted by great power.

Player rights are very much akin to black rights. It is not only a race-based issue but largely a class issue. It is camouflaged class warfare, on top of race warfare. Two ugly issues, intertwined and inseparable.

As an excellent prime example of what I referred to above is this document below. It was written in 1946, and remains a pristine example of sophistry and evil, pretending to be concerned, at its best.

The Sporting News, February 25, 1978, pp. 43

This report, on race relations, submitted August 28, 1946, to ML BB. This is an excerpt from a 25 page report, prepared by a special committee composed of Ford Frick, Will Harridge, Sam Breadon, Tom Yawkey, Phil Wrigley and Larry MacPhail.

Thank you so very much, Ubiquitous!!!

This sickening attempt to make themselves appear concerned about the welfare of the Negro players. Such feigned innocence can only be the product of wealth hiring the most high-powered advertising/marketing whores to make bald-faced hypocrisy/cynicism sound reasonable, as business as usual.

Hey, here's a question. During the period when the PCL was semi-independent, and when I understand some players actually made more in the Coast League than NL/AL stars were getting at the same time... was there the same standard contract with the same reserve clause there too? Did the PCL respect (if that's the word) the blacklists of the major league teams? (I take Beady's comments above, to imply that this was the case.) Was the choice to play in the Coast League or in a major league organization essentially a one-time choice, at most?

"If prior to March 1, the Player and the Club have not agreed upon the terms of the contract, then on or before 10 days after said March 1, the Club shall have the right by written notice to the Player to renew this contract for the period of one year."

I must admit that at this point I'm thoroughly puzzled as to the basis of the Seitz decision. I had understood that if a player didn't sign a contract after his contract for season One had expired, the club could keep him bound to play for him during season Two, but that the clause did absolutely nothing more than just that -- that is, it purely and simply compelled him to play for the same club during season Two. Being bound by the reserve clause in his old contract to play for his team during Two but not being under a current contract, he could therefore not be compelled to play for the team against his will during season Three, since there was now no reserve clause that could be used to hold him. The reserve right had expired with the previous contract.

Now I see that the clause doesn't just bind the player to remain with a particular team, but specifically says the club may "renew this contract." I'm not a lawyer, but it just seems simple common sense that when a contract is renewed, the renewal must apply to all the terms of the contract, and not just the team the man is to play for. He is thus bound by a contract for season Two that is exactly identical to the one for season One in every respect except the time period covered. The reserve clause he had in his season One contract is duplicated in his contract for season Two, allowing him to be held for season Three; and if he still holds out, he can be renewed for that year, and the process can be repeated in an infinite regress, ending only when he has no value to the team whatsoever, and not necessarily even then (the infielder Joe Sullivan appeared on a St. Louis Browns reserve list many months after he had died).

Evidently I must be wrong in understanding things this way, because Seitz ruled differently and the baseball lawyers don't even seem to have tried my line of argumentation. So what's my mistake?

I must admit that at this point I'm thoroughly puzzled as to the basis of the Seitz decision. I had understood that if a player didn't sign a contract after his contract for season One had expired, the club could keep him bound to play for him during season Two, but that the clause did absolutely nothing more than just that -- that is, it purely and simply compelled him to play for the same club during season Two. Being bound by the reserve clause in his old contract to play for his team during Two but not being under a current contract, he could therefore not be compelled to play for the team against his will during season Three, since there was now no reserve clause that could be used to hold him. The reserve right had expired with the previous contract.

Now I see that the clause doesn't just bind the player to remain with a particular team, but specifically says the club may "renew this contract." I'm not a lawyer, but it just seems simple common sense that when a contract is renewed, the renewal must apply to all the terms of the contract, and not just the team the man is to play for. He is thus bound by a contract for season Two that is exactly identical to the one for season One in every respect except the time period covered. The reserve clause he had in his season One contract is duplicated in his contract for season Two, allowing him to be held for season Three; and if he still holds out, he can be renewed for that year, and the process can be repeated in an infinite regress, ending only when he has no value to the team whatsoever, and not necessarily even then (the infielder Joe Sullivan appeared on a St. Louis Browns reserve list many months after he had died).

Evidently I must be wrong in understanding things this way, because Seitz ruled differently and the baseball lawyers don't even seem to have tried my line of argumentation. So what's my mistake?

I don't understand you line of reasoning. The reserve clause says a club can renew the contract for one year. It doesn't say the club can do this year after year.

I don't understand you line of reasoning. The reserve clause says a club can renew the contract for one year. It doesn't say the club can do this year after year.

So when he won't come to salary terms during the offseason of 1950/1951 the club takes advantage of the reserve clause to renew his 1950 contract for 1951. It's limited to that one additional season, as you say, but in doing so they have created a new contract just like the old one except for the time period covered. Among various other things, it contains a reserve clause allowing them to reserve him for a season, and on the basis of that, a year later they can renew him for 1952 if he's still holding out. And if he's holding out the spring after that, they can do the same thing, renewing him for 1953 on the basis of his 1952 contract, and so on.

Quite possibly there's a flaw here, but I still don't see it. Am I misinterpreting "renew?"

Hey, here's a question. During the period when the PCL was semi-independent, and when I understand some players actually made more in the Coast League than NL/AL stars were getting at the same time... was there the same standard contract with the same reserve clause there too? Did the PCL respect (if that's the word) the blacklists of the major league teams? (I take Beady's comments above, to imply that this was the case.) Was the choice to play in the Coast League or in a major league organization essentially a one-time choice, at most?

The PCL was part of organized baseball. I think very early there was a period when they weren't, but they were brought in by the early 20th century. Basically, with some nuances at some period, they were just another minor league, though a strong one.

The reserve clause system doesn't have to be absolutely airtight, but it wouldn't survive too long if there were a really viable outsider bidding for players. Even a single outside league able to compete effectively for players will push up salaries to a level pretty nearly what they would be if the market were completely open. The organized clubs adhering to the reserve system would then lose most of the advantages of the reserve system -- cost control and certainty in controlling their own roster -- while still suffering all its disadvantages -- can't sign players from any of the teams in their own league or other organized baseball leagues.

For this reason, you can assume that the PCL, or any other league that might have been capable of signing major league talent in any significant number for more than a couple of years, must have accepted the reserve system. From the time the full-roster reserve was enacted in 1883, the logic of the situation absolutely compelled the organized leagues to declare total war on any league that did not accept their reserve rights. Their only choices were to drive the interloper out of business, co-opt it into the system or give up the reserve altogether. They were never willing to take the last course of action, and so they have always adopted some combination of the first two.

So when he won't come to salary terms during the offseason of 1950/1951 the club takes advantage of the reserve clause to renew his 1950 contract for 1951. It's limited to that one additional season, as you say, but in doing so they have created a new contract just like the old one except for the time period covered. Among various other things, it contains a reserve clause allowing them to reserve him for a season, and on the basis of that, a year later they can renew him for 1952 if he's still holding out. And if he's holding out the spring after that, they can do the same thing, renewing him for 1953 on the basis of his 1952 contract, and so on.

Quite possibly there's a flaw here, but I still don't see it. Am I misinterpreting "renew?"

Ok, but using your line of reasoning then a team could not give a player a raise or cut in pay if they have to renew a contract with exactly the same terms as the previous one.

contract A: $5,000 salary
contract B: Also must have a $5,000 salary if it is a exact renewal of the contract A.

"If prior to March 1, the Player and the Club have not agreed upon the terms of the contract, then on or before 10 days after said March 1, the Club shall have the right by written notice to the Player to renew this contract for the period of one year."

That is the entirety of this infamous, dreaded clause. That's it. No more, no less. Of course, it was legal nonsense, made no sense and was ridiculous.

The owners knew it and the players knew it. In 1914, Walter Johnson actually wrote an article and he used the phrase, 'player slavery'.

Since the clause was completely illegal, the owners lived in constant terror that it might someday be taken to court and challenged. It would have surely been flushed down the toilet of history quite quickly.

The owners were cunning enough to secure for themselves an exemption from the national Sherman Anti-Trust Law. This was a naked admission that they were in flagrant violation of a person's right to work according to normal business rules. If they didn't think they were in violation of it, then why the need for an exemption at all?

This baseball situation is a typical example that laws actually do not mean much. The only thing that is important is if people think they do and thus act accordingly.

So, even though the 'reserve clause' was illegal, the players acted as if it was legal. The players were not uniting to demand their rights.

If the players had simply refused to sign contracts with the reserve clause in it, what could the owners have done? Nothing. But the players were far too cowed to refuse such contracts, and continued to sign away their normal, legal rights, year after year, decade after decade.

If only one player refused to sign such an illegal contract, the courts would probably not have enforced their legal rights. The courts would have probably backed the owners, because the owners had more money to hire arrogant lawyers, and had more political clout.

But the players had enormous resources if they had only acted collectively. But it will remain a mystery why they acted like sheeple for over 100 years.

Often the courts will not enforce people's normal, natural rights. The income tax has been illegal since 1908, yet the courts routinely refuse to enforce citizens' rights.

Even if the reserve clause had even been put into written contracts, if was entirely probable that the other owners would have simply followed an unwritten 'Gentleman's Agreement' to not sign other owner's previous players. So, the clause need not have been written down to be passed on, generation to generation.

That is how the Color Ban was enforced. It was never a written document, only an implied agreement among owners to not hire blacks as baseball players.

That is how blacks were kept out of many white neighborhoods for so long. Apartment owners colluded secretly to not rent them apartments/houses. And that crap is no doubt still going to continue as long as the culprits can get away with it.

That is how social cliques are maintained in high schools. That is how the Pennsylvania Dutch Amish people preserve their social traditions - shunning.

The only way that things ever change, is if large numbers of right-thinking progressives unite and mobilize. The many can use collective counter-measures to neutralize the long-running hateful habits of the few.

Power seldom gives an inch. It will fight long after it is discredited and socially condemned. It lives in the dark, and pays big money to high-priced lawyers. High-priced legal whores have lived like kings by doing the bidding of the few privileged people who sign their checks.

The baseball owners have long retained the services of such amoral lawyers. In-house whores who make their clients rich, and enrich themselves along the way. They will never quit. Not all jungle animals walk on all fours. Many wear 3-piece suits and populate corporate board rooms, and the corporate back-rooms, where the secret crap is hatched, camouflaged and spewed.

They locked out of the baseball pension in the 50's all the early stars. They locked out of the American Dream all blacks ballplayers until 1947. Then they let in only the black stars, all the while kicking and screaming. Then they continued to lock the black journeymen out of the American Dream until the 60's. They continue to refuse to send out small stipend checks to their black victims who are still alive today, waiting in nursing homes to die.

These same vile baseball millionaires will refuse to hire blacks in many management positions, or managers' positions, or umpire jobs, or cushy stadium concessionaire positions, or many coaching jobs. Why?

Because power seldom gives an inch. It only backs up strategically, if it believes it has to, when confronted by great power.

Player rights are very much akin to black rights. It is not only a race-based issue but largely a class issue. It is camouflaged class warfare, on top of race warfare. Two ugly issues, intertwined and inseparable.

Gee, Bill, you haven't posted one of your famous soapbox posts in quite a while.

The Seitz decision was a ruling by arbitrator Peter Seitz on December 23, 1975 which declared that Major League Baseball players became free agents upon playing one year for their team without a contract, effectively nullifying baseball's reserve clause. The ruling was issued in regard to pitchers Andy Messersmith and Dave McNally.

Since the 1880s, baseball owners had included what was referred to as the reserve clause in every player contract. The agreement allowed teams to renew a contract for a period of one year following the end of a signed contract. Since owners rarely allowed players to play without signing a new contract the process had the effect of holding the player to the team with which he first signed indefinitely. This eliminated all market competition and kept salaries relatively low.

In 1975, Messersmith of the Los Angeles Dodgers and McNally of the Montreal Expos were the only two players playing on the basis of this reserve clause. Since neither signed a contract during that option year, both insisted that they were free to sign with other teams the following season. The owners disagreed, arguing that under the reserve clause the one-year contracts were perpetually renewed.

The two players submitted the grievance to arbitration, and Seitz later issued his ruling that Messersmith and McNally were free to bargain with other teams because organized baseball could not maintain a player's services indefinitely.

MLB appealed the decision to the United States district court for Western Missouri, but Seitz' ruling was upheld on February 4, 1976 by Judge John Watkins Oliver, and later by the 8th Circuit Court of Appeals. After all appeals were exhausted, Major League Baseball and the Major League Baseball Players Association signed a new agreement in 1976 allowing players with six years experience to become free agents.

Since neither Messersmith nor Mcnally signed a contract did that mean their respective teams were not under any obligation to pay their salary?

Twenty-five years ago yesterday, an arbitrator rendered a decision that forever changed baseball and the business of sports: he created free agency.

The ruling put in place the mechanisms that led to Alex Rodriguez's record $252 million contract and Manny Ramirez's $160 million deal two weeks ago. At the time, the decision provoked Charlie Finley, then the owner of the Oakland A's, to suggest a way to prevent such staggering salaries: annual free agency for all players to swing the baseball economics of supply and demand squarely on the side of supply.

Indeed not. Kuhn, a former baseball commissioner, had perhaps never said so, certainly not in public, not about the owner who once labeled him ''the village idiot.''

On Dec. 22, 1975, Kuhn and Finley were on the same side, the losing one. Peter Seitz, then baseball's impartial arbitrator, created free agency when he supported a grievance filed by two players, Andy Messersmith and Dave McNally. With Marvin Miller, the players' labor leader nonpareil, agreeing with Seitz against the dissent of John Gaherin, the owners' chief labor negotiator, Seitz found that the renewal clause in players' contracts, paragraph 10 (a), lasted for only one year, and when it expired, so did the players' links to their teams. The reserve system, the 65-page opinion said, did not enable a team to retain a player with whom it did not have a contract.

No other decision has had a greater impact on the sports profession.

''It not only changed baseball, but it changed all sports,'' Kuhn said.

The decision may also be the most important labor-arbitration case because it has resulted in a greater transfer of wealth from ownership to employees than in any other case.

''The difference between winning and losing can be stated in billions and billions of dollars,'' said Richard Moss, the union's lawyer who argued the case. ''I don't think you can find another labor-arbitration case that can say that.''

Miller went a step further. ''While I think the money impact is noteworthy and makes a good story,'' he said, ''more was involved than that. The whole freedom issue has always gotten underplayed, the difference between being a piece of property your whole career and not. That's not the kind of thing you can measure against other cases.''

The impact of the ruling is clear; how it came about is a murkier tale.

McNally's Role Was Crucial

Andy Messersmith was a pitcher for the Los Angeles Dodgers who played the 1975 season under a renewed contract. He did not sign a new contract because the Dodgers refused to give him a no-trade clause. Dave McNally, who pitched for the Montreal Expos, also played that season with a renewed contract, until he retired in June.

Messersmith was the initial player in the case; McNally was added as a backup.

''His role was crucial,'' Miller said of McNally. ''If he had not lent his name to the grievance, there's not much question that when the chips were down they would have met Messersmith's demand for a no-trade provision -- they had already met his salary demands -- and there would have been no case.''

But as Moss saw the case, ''It could've been Torre instead of Messersmith.''

Joe Torre was one of two players -- Jim Bouton was the other -- who testified at the hearing. Torre, now the Yankees' manager, related his experience in 1969, when the Atlanta Braves renewed his contract at the maximum 20 percent cut and he responded by saying he would not play for them until they offered him the same salary he earned the previous season. Instead of calling Torre's bluff or giving in to him, the Braves traded him to St. Louis, where he signed a new contract and played for the Cardinals.

Had he not been traded and had he remained unsigned, Torre could have provided the players association with its test case six years earlier. On the other hand, the owners might have fared better at the time because Seitz would not have been the arbitrator. Seitz, who was not unknown in the world of sports arbitration, also served in the same role for the National Basketball Association.

''I had really serious reservations about Peter Seitz as an arbitrator,'' Kuhn said. ''He was a nice guy; I liked him. I didn't think he was the right man to be handling a decision of that magnitude. I thought his credentials from his N.B.A. days leaned in the direction of the players.''

In addition, Seitz had ruled a year earlier in favor of Jim (Catfish) Hunter in his breach-of-contract grievance against Finley, a decision based on a technicality that allowed the Oakland pitcher to sign with the Yankees.

''We thought before the hearing about discharging him,'' said Lou Hoynes, who was management's lead lawyer in the arbitration case. ''I would have after what I saw in Hunter. The Hunter decision gave us a sense of Peter Seitz's view of the world. It seemed like he was hostile to ownership and the rules of the game. He was looking for a loophole to make the players free.''

Either side can unilaterally fire an arbitrator with no reason needed, but Hoynes said most management people felt at the time it would have been ''a public relations black eye'' to dismiss Seitz. Once the case had been heard, with hearings on Nov. 21, Nov. 24 and Dec. 1, however, a person who was involved in the case said, some people in management wanted to sever Seitz before he issued his decision. But they never pulled the trigger.

They did so, on the other hand, as soon as he rendered his ruling.

''I can't say he was fired before the ink was dry,'' Miller said, ''because we hadn't signed it.''

Miller said that when he was handed the ruling, he turned to the decision page -- page 62. He said Gaherin did the same. Seeing that Seitz had ruled for the players, Miller recounted, Gaherin looked up and said, ''Peter, I love you, but I'm firing you.''

''What amazed me was he surprised Seitz,'' Miller added. ''I would have thought an experienced arbitrator in a case like that would have expected it. I think what surprised Seitz was he hadn't kept his opinion secret. He had telegraphed it in advance, saying in effect, 'Take this case away from me; negotiate something.' He thought his opinion wouldn't be a surprise.''

A Signal From Seitz?

Seitz died in 1983, Gaherin early this year, leaving Miller, 83, as the only surviving member of the three-member panel that met at Seitz's Central Park West apartment on Dec. 8, 1975, two weeks before the ruling. The general understanding of that meeting has always been that the arbitrator signaled to Miller and Gaherin that he was prepared to rule against the clubs but would rather have the two sides negotiate a settlement of their differences over players' freedom.

But Hoynes disputed that notion.

''We didn't understand Peter to have given us a clear view of what his decision would be,'' Hoynes said in a recent telephone interview. ''I wasn't in the room, but I know what we were told. We were told we might not be happy with the decision, but there were variables in the decision. There was a wide range of things. It was altogether unclear.''

Others disputed Hoynes's recollection.

Barry Rona, who was the owners' chief labor lawyer, was not at that Dec. 8 meeting with Gaherin, but recounted what Gaherin told him about it.

''What Seitz was saying Lou chose to interpret and Bowie chose to interpret as Seitz being more flexible,'' said Rona, ESPN's senior vice president for business and legal affairs. ''John and I read it differently. We had an internal debate over what signals Seitz was giving us. John and I felt he was giving us a negative signal. Marvin interpreted it the same way.''

Miller concurred, noting that Seitz had also offered to reinforce Gaherin's position with the owners by writing a letter to Gaherin outlining his views.

''Would it be helpful if I sent a letter to you giving my feelings about the case so there would be no question about your making this up?'' Miller quoted Seitz as asking Gaherin.

''It would be very helpful if I had a letter from you,'' Miller quoted Gaherin, emphasizing that the letter, four to six pages long, was sent to Gaherin, not him.

And then there was Gaherin's own view of the message he received from Seitz and delivered to his bosses at a meeting in Florida. ''I knew we were going to lose,'' Gaherin said in an interview for the 10th anniversary of the decision.

Frank Cashen, then a member of the owners' labor board, confirmed Gaherin's message. ''He did tell us which way he was leaning,'' Cashen said of Seitz.

With Kuhn and Hoynes opposed to the idea of negotiations, the owners did not give Gaherin and Rona permission to try to work out a settlement. They decided to let Seitz rule, then go back to court to have his decision overturned.

''They were convinced they could reverse in court,'' another lawyer said Hoynes told him.

Rona said that too many people on management's side, including Kuhn and Hoynes, were too close to the case.

''You really should take a couple steps back and let an outsider look at it and give you an evaluation,'' Rona said.

Instead they returned to what they perceived would be a friendly court, the United States District Court in Kansas City, Mo. They had gone there initially seeking to forestall the arbitration hearing.

''We thought it was a conservative court,'' Rona said. ''It was researched pretty carefully going up to the Circuit Court of Appeals.''

But the luck of the draw went against management. ''We wound up before Judge John Oliver, one of the most activist federal judges in the country,'' said Moss, whose argument for the players had induced Seitz to rule for them.

Kansas City was also the home of Donald Fehr, whom the union hired as the local counsel for the arbitration appeal, and subsequently, as Moss's replacement as general counsel and then Miller's replacement as executive director.

The players won before Oliver and the appellate court. Free agency was theirs.

In 1975 Messersmith had a 19-14 record and a 2.29 earned run average following a 20-victory season in 1974. Once he was a free agent, he signed a three-year, $1 million contract with Atlanta. He also played for the Yankees and returned to the Dodgers, with whom he finished his career in 1979. But he was never as effective or as healthy as he had been before free agency, gaining a total of 18 victories in his final four seasons.

McNally, who earlier in his career had been a 20-game winner four times with Baltimore, was traded to Montreal before the 1975 season and retired in June of that year with a 3-6 record. He did not play again.

Advice Goes Unheeded

Kuhn, in hindsight, said management ''probably'' would have benefited from accepting Seitz's advice and negotiating a settlement.

''At that point in that context,'' the former commissioner said, ''you can always pull out of negotiations and say, 'Arbitrator, do what you're going to do.' But in that setting, probably something better could have been negotiated than was. But the difference could be tweedledee tweedledum.''

In Rona's recollection, ''given what Marvin was saying at the time, where he seemed to be in his own thinking,'' a negotiated settlement could have been ''a lot more favorable to the owners than what they wound up with.''

Even Miller said he could not go back 25 years and determine what he might have accepted at the bargaining table without Seitz's decision. He did know, he added, that he would not have compromised Messer smith or any player who had not signed a contract for 1976 based on the expected outcome of the arbitration.

But, Miller said, ''We were ready to negotiate on everything else.''

Moss, the union lawyer, said that what he recalled from the hearing ''was Bowie Kuhn's testimony and how baseball would absolutely be ruined without the reserve system as we knew it then.''

If the players won, Kuhn testified, baseball would not vanish, but it would struggle to survive. The commissioner foresaw the loss of clubs, the loss of employment for players and others, the loss of the ability to expand, the loss of minor leagues (''if not all of them, most of them''). And, he testified, ''I think the loss of a major league is quite possible.''

Six expansion cities and 150 additional jobs for players later, the major leagues still number two, and minor league baseball is flourishing.

Kuhn nevertheless maintains that his predictions would have been correct but for the workable system that emerged ''with the very real cooperation of the players association and Miller.''

Kuhn making complimentary comments about Miller and Finley is a development almost as dramatic as the growth in salaries the past 25 years.